Act 2010 (BA) is defined as “giving or receiving a financial or
other advantage in connection with the “improper performance” of a
position of trust, or a function that is expected to be performed impartially
or in good faith”1. With
the BA 2010 Act, the law has moved away from considering the narrow duty owed
by an agent to his principal and instead considers the duty owed by those in a
position of authority to all those with whom they deal and to the public at
large. The general bribery offences make no distinction between bribery in the
public or private sphere, the focus of the offences is the harm to society at
large rather than simply the harm to the principal of the corrupt agent.
The first ever legislative act
which included bribery was the Bubble act 1720. The 1720 act, produced an
offence of commercial deception, and was recognised following the downfall of
the South Sea Company; “which has been described by academics as a grandiose
scheme that manipulated the parliamentary system through generous bribes”2. After the repeal of the
bubble act there was an emptiness in the law consistent to corruption as no
provisions were made to overtake its place. This matter was somewhat decided in
the formation of the public Bodies Corrupt Practices Act 1889. The title was
only linked to the corruption happening in the state and other public bodies.
Under the old laws in the UK, while acceptance of a bribe
by a public official was a crime, acceptance of a bribe by a private actor was
not a crime, unless contrary to agency law. To be liable for bribery under the
BA 2010, the test is whether a reasonable person in the UK thought it a bribe.
For example, it is likely that a reasonable person in the UK would think it
bribery for a pharmaceutical company to pay doctors who prescribe its products
to patients. In 2012, in an example from the USA, a British pharmaceutical
company, GlaxoSmithKline, settled to
pay $3 billion in a case where the prosecutors said the company had tried to
win over doctors by paying for trips to Jamaica and Bermuda.
The act was announced
to amend and improve UK law on bribery together with foreign bribery in an
attempt to highlight the better requirements of the 1997 OCED anti-bribery
Convention. Globally, it can be classed as one of the strictest legislation on
bribery as well as representing the most drastic changes to anti-corruption
regulation in the UK. Not to forget, it also introduced a new liability offence
especially created for companies and partnerships for taking inadequate
measures to prevent bribery. It
is important to prevent bribery as bribery undermines democracy and the rule of
law, and poses very serious threats to sustained economic progress in
developing and emerging economies and to the proper operation of free markets
Unfortunately, the effect of
these new amendments have proven to be less successful. Even with supervision
from “the Ministry of Justice and Serious Fraud Office (SFO) directors, there
still remains significant
uncertainty among businesses
regarding interpretation, particularly
relating to ‘foreign public
officials,’ hospitality and facilitation payments, self- reporting, sentencing
and fines, adequate procedures, and the meaning of ‘associated person’ and
‘relevant commercial organisation”3. It
seems as though that the theoretical suggestions of the UKBA will be based on
how the SFO aims to apply its implementation authority. Consequently, in reply
to these underlined uncertainties, it will be emphasized that businesses have
no real choice but to impose a strict anti-corruption regime in an attempt to
minimise the risk of them sustaining criminal charges for their fraudulent
behaviours under the UKBA.
For example, in the case of Sweett Group Plc, the company pleaded guilty in 2015 as they failed
to prevent an act of bribery that was planned to secure a contract with Al Ain
Ahlia insurance Company, in contrast to Section 7(1)(b) of the Bribery Act
2010. The contract was summarised by the sentencing judge (HHJ Beddoe) as a vehicle
to provide a “bung” and therefore, was “sentenced and ordered to pay £2.25
million as a result of a conviction arising from a Serious Fraud Office
investigation into its activities in the United Arab Emirates”4. This shows how the lack
of anti-corruption regime could lead companies in a massive financial loss thus
the only way the companies can avoid being convicted of the offence of failing
to prevent bribery by showing that they had adequate procedures in place to
prevent bribery. The standard of proof which the commercial organisation would
need to discharge in order to prove the defence, in the event it was
prosecuted, is the balance of probabilities.
The SFO’s guidance in regards to foreign public officials can
be seen as extremely confusing as it still fails to deliver the precise amount
of control that must be applied by the state’s legislatures over the corporation’s
dealings to “qualify those representatives as foreign public officials”5. It is suggested that the
SFO should be able to provide more guidance in order to minimise the risk of UK
business suffering criminal liability and the financial loss. Lim makes a valid
argument, “that in response to the continuing confusion, UK businesses should
be vigilant when dealing with companies in foreign countries, and perhaps err
on the side of regarding them as State-owned enterprises employing foreign
As a result, this would reduce the fines and imprisonment convictions.
Prior to the UKBA 2010, UK anti-bribery law contained of the common law
offence of bribery as well as the Public Bodies Corrupt Practices Act 1889 and
the Prevention of the Corruption Act 1906. It
was an offence for a person to bribe the holder of a public office, or for any
such office holder to accept such a bribe. In R. v Whitaker (1914),
where Lawrence J said: “A public
officer is an officer who discharges any duty in the discharge of which the
public are interested, more clearly so if he is paid out of a fund provided by the public. If taxes go to supply his payment and the
public have an interest in the duties he discharges, he is a public officer”7.
The Prevention of the Corruption Act 1906 “concerns corruption of agents. S.1
offence made it an offence for an agent to obtain a consideration as an
inducement or reward for doing any act, or showing favour or disfavour to any
person, in relation to his principal’s affairs”8.
In the case of R v Godden-Wood (2001),
the appeal was unsuccessful against his conviction for conspiracy to corrupt “where
the circumstantial evidence against the appellant was compelling, there was no
distinction between corruption in terms of the Prevention of Corruption Act
1906 and corruption in the context of public bodies”9. In contrast, with the
case of R. v J (2013) where the
judge focused on the definition that the payment was made ‘corruptly’ and “Corruptly”
meant purposefully doing an act which the law forbade as tending to corrupt.
This form of law was termed as “inconsistent, anachronistic and
regards to its “capacity to comply with modern international anti-corruption
legislation reform in the UK was “undeniably driven by the conclusions in the
‘Nolan Report’ produced by the Committee on Standards in Public Life in 1995″12.
One of the main points highlighted in the report was that “public officials, on leaving
office, were taking up positions in companies with which they had had official dealings”13.
Thus, the Nolan report suggested reforms of the law on bribery. In the report it was also mentioned that it is acknowledged that the existing practical law “governing bribery in the
UK is characterised by complexity and uncertainty”14. The
report also confirmed the insufficiency of the UK’s anti-corruption system at
that particular time. Hence, it was highly recommended by the UK government
that the Law Commission to reconsider the rules as soon as possible.
In 2008, The Organization for Economic
Cooperation and Development (OECD), working group published a report criticising,
UK for failing to stop bribes being paid by its businesses in the markets in a
foreign country. “Overall, the Group is disappointed and seriously concerned
with the unsatisfactory implementation of the Convention by the UK.” 15
This report shows the disappointment felt by the Working Group in regards to
the insufficiencies in the UK government’s tactic and their constant delay in
executing the requests of the agreement. Undeniably, this disapproval was a key
influential factor towards prompting the government to introduce reform in this
area of the law. The
UK government aimed at establishing a clear legal, regulatory and policy
framework for action against foreign bribery.
An example of the case that seems to have obliged the UK Government to
take absolute corrective action, was the bribery scandal of BAE Systems plc. “In December 2004, a
whistle-blower claimed that BAE controlled and availed of a US$120 million
bribery fund to facilitate the securing of defence contracts, a practice that
had allegedly been undertaken for decades. The disclosure triggered a SFO
It was alleged that “BAE had paid massive
bribes to Saudi royals”17 in order to secure a
contract which later known as the Al Yamamah transaction. “Al-Yamamah is
technically an agreement between the British and Saudi governments, with BAE as
the prime contractor supplying the planes and military equipment”18. However, despite the
serious allegations made against BAE systems, SFO dismissed their inquiry
stating that UK’s national security was at risk.
major problem in reducing bribery in the commercial world “has always been on
how to hold the company as an entity liable for bribery”19. This can be due to the
fact that as opposed to a natural person who has a mind to carry out the
illegal acts, the company “being an artificial entity, has no mind of its own.
To overcome this problem, the law developed a doctrine of attribution where
acts of senior officers of the company are attributed to the company”20. In Tesco Supermarket Ltd v.
Nattrass (1972), Lord
Reid said that “the person acting for the company is an embodiment of the
company, and his mind is the mind of the company, such that if it is a guilty
mind, then that guilt is the guilt of the company. However, the rules on
corporate attribution depend on involvement of senior officers of the company,
and are deficient where only junior officers are involved in the relevant criminal
acts the BA 2010 goes beyond attribution”21.
problem of bribery is a destructive one and weakens our trust in markets as
well as assurance in the rule of law. The aim of the law on bribery just focus
on protecting and improving free markets for commercial dealings. as we are
aware, that whilst UK had been slow in reforming its laws on bribery in regards
to foreign corrupt payments by UK companies and agents, the BA 2010 can be seen
as a ray of hope that potential changes are occurring, which may result in a
more “fundamental cultural change in the practices of many UK companies”22.
By taking a controlling authorisation tactic for commercial bribery, the BA
2010 is likely to be a more effective law not only for reducing bribery, but
also for guarding and improving free markets for commercial transactions.
The down side of the act can
be that the penalties enforced on the individuals or the business can be too
harsh. Even-though, the strict penalties will force the companies to take more
control over their anti-bribery regime but the question is does it go too far?
Does the act put more difficult rules on these UK companies so they are losing
out and are behind in the market compared to their foreign competitors? As
under this act, unlimited fine can be given to an individual or 10-year
Overall, the UKBA 2010 does
certainly have huge potential, but its real-world effects have yet to be
illustrated. It is very obvious that the UK is taking action against corruption
by enforcing a zero-tolerance method on the business related crimes however,
Government’s ambition of finishing bribery in the UK will still take more time.
Without “greater global harmonisation of anti-bribery law and enforcement,
ambiguities will remain, as one man’s bribe is another man’s gift”23. In addition, it is also
very clear that the fundamental renovation of the law the UKBA 2010 symbolises
was undeniably a result of severe global criticism and UK’s Government
humiliation concerning the BAE scandal. Despite the Act’s enactment, and the
states guidance on several issues, important concerns still exist within the
commercial community in regards to the lack of legal certainty surrounding the
Act’s clarification of business generosity which needs to be worked on. Section
6 of the UK Bribery Act 2010 is also very important in explaining the
importance of the act. As this offence focuses on the bribery obtained from
foreign public officials for their business. As this jurisdiction is global
this means that no British Citizen can escape conviction of bribery. This means
that now the companies are well aware of their stance in receiving gifts and
hospitality. The act needs to go under review constantly in order to make the
legislation more effective and prevent the individuals and companies escaping
conviction for bribery as this is a criminal offence and individuals needs to
be punished for it.
4 ‘Sweett Group PLC Sentenced And Ordered To Pay £2.25 Million
After Bribery Act Conviction’ (Serious Fraud Office, 2017)
accessed 14 October 2017
Lim, (Legislative Comment) ‘Parting the fog of the UK Bribery Act 2010: a
critical discussion of what we do know about the Act and why it is in the
company’s interests to comply with its provisions’ (2014) 25(1) International
Company and Commercial Law Review 1.
Matt Atkins, ‘Introduction to the UK Bribery Act’ (2011) 6 Financier Worldwide
11 Dr Karen Harrison & Dr Nicholas Ryder, The Law Relating to Financial
Crime in the UK (2013, Ashgate Publishing) 44.
L. (1995), First Report on Standards in Public Life, The Stationery
Law Commission, Reforming Bribery (Law Com No 313, 2008) The Stationery Office,
Directorate for Financial and Enterprise Affairs, ‘United Kingdom: Phase 2bis
Report on the application of the convention on combating bribery of foreign
public officials in international business transactions and the 1997
recommendation on combating bribery in international business transactions’
Korkor & Margaret Ryznar, ‘Anti-Bribery Legislation in the United States
and United 438
Journal of Financial
Crime/2015/Volume 22/Issue 1, 1 January/Articles/British law on corporate
bribery – (2015) JFC 22(1), 8
Tomasic, R.”The financial
crisis and the haphazard pursuit of financial crime”, Journal of
Financial Crime, Vol. 18 No. 1, (2012), 12
Hyde, ‘In Practice: Practice Points: “Grease” is the word’ (17 June 2013) 22
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